Benefits, Benefits Compliance, Health Care Reform, HRAs & HSAs

2018 Dollar Amounts and COLAs for Benefit Plans

The IRS and Social Security Administration each year announce the cost-of-living adjustments affecting tax and employee benefits dollar amounts for the upcoming calendar year. Some highlights for 2018 (& 2017) are listed below. Note that the annual cap on employee pre-tax contributions to a Health FSA (IRC § 125) has increased $50, to $2,650; H.S.A. and HDHP amounts have increased, and the HCE threshold remains the same at $120,000.

Tax Benefit 2017 2018
Highly Compensated Employee (HCE) Threshold –  IRC §414(q)(1)(B) $120,000 $120,000
Key Employee, Officer –  IRC § 416(i)(1)(A)(i) $175,000 $175,000
Social Security Taxable Wage Base   –  § 2230 of Social Security Act $127,200 $128,700
401(k), 403(b), Profit-Sharing Plans:                                                2017                             2018
Maximum Elective Deferrals (annually)   –  IRC § 402(g)(1) $18,000 $18,500
Catch-up Contributions     (for those age 50 and older) $ 6,000 $ 6,000
Annual Compensation  –  IRC § 401(a)(17) $270,000 $275,000
Annual Defined Contribution Limits  –  IRC § 415(c)(1)(A) $54,000 $55,000
Individual Retirement Accounts (IRAs):                                          2017                             2018
IRA Contribution Limit $5,500 $5,500
IRA Catch-up Contributions (age 50 and older) $1,000 $1,000
Health Savings Accounts (H.S.A.s):   IRC § 223(b)(2)(A)                 2017                             2018
Maximum Annual Contribution – Individual Coverage $3,400 $3,450
Maximum Annual Contribution – Family Coverage $6,750 $6,900
Catch-up Contribution – age 55 and over  – IRC § 223(b)(2)(A) $1,000 $1,000
High Deductible Health Plan (HDHP):   IRC § 223(c)(2)(A)           2017                             2018
Minimum Annual Deductible – Individual Coverage $1,300 $1,350
Minimum Annual Deductible – Family Coverage $2,600 $2,700
Maximum Out-of-Pocket Expenses – Individual Coverage $6,550 $6,650
Maximum Out-of-Pocket Expenses – Family Coverage $13,100 $13,300
Non-HDHP Health Plans (Not H.S.A.-Compatible) (No minimum deductible)
Maximum Out-of-Pocket Expenses – Individual Coverage $7,150 $7,350
Maximum Out-of-Pocket Expenses – Family Coverage $14,300 $14,700
Dependent Care Assistance Plan (DCAP) & Health Flexible Spending Account (HFSA)
Maximum Annual Pre-tax Contribution through 125 Plan:      2017                             2018
DCAP if employee is married and filing a joint return or is a single parent filing as “House of Household”   –   IRC § 129 $5,000 $5,000
DCAP if employee is married but filing a separate return from spouse $2,500 $2,500
HFSA, regardless of marital status $2,600 $2,650
Qualified Transportation Benefits:      IRC § 132(f)                           2017                             2018
Parking – monthly maximum $255 $260
Vanpooling & Transit – monthly maximum $255 $260
Affordable Care Act Amounts                                                                2017                             2018
Annual 5000A(c) penalty for individual not having “minimum essential coverage” (MEC):  greater of dollar amount or a percentage of modified adjusted gross income (MAGI)  – file Form 8965 if a tax is due $695 or 2.5% $695 or 2.5%x
Annual 4980H(a) penalty for large employer not offering MEC to at least 95% of full-time employees.  Penalty amount is times total number of full-time employees minus 30 $2,260 $2,320
Annual 4980H(b) penalty for large employer not offering affordable minimum value coverage to all full-time employees.  Penalty amount is per each full-time employee who qualifies for a subsidy to buy insurance in the marketplace. $3,390 $3,480

 

IRS Notice 2017-64  (retirement plan limits) at https://www.irs.gov/pub/irs-drop/n-17-64.pdf

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